Stop using diapers!:
Diaper rash is not caused by urine or by stool, it is caused by diapers. Changing frequently and changing brands can help. In severe cases, put the baby on absorbent sheets and don't use a diaper at all until the rash is gone. It is messy, but it works. If the rash is already severe, you will need help from your babies doctor.
...Read more

2

Intertrigo:
This condition is caused by moisture build up along the crease between the skin folds. Keeping the area clean and dry is essential.
In case the skin condition gets worse, have your baby checked for superinfection with yeast infection.
...Read more

5

Yes:
A person can develop a significant allergic reaction to any protein containing substance.This can happen early on in life or later.Coconut oil or various components of this complex material can trigger allergies. Food reactions often trigger hives all over so if located only in the diaper area it may or may not be unrelated.
...Read more

8

May be yeast/candida:
A trial of antifungal cream like lotrimin af cream otc (aka 1% clotrimazole) can be used to eliminate this rash. Apply twice daily and you should see improvements over the next week. Airing the area out-allowing the area to breath will facilitate improvement. I am assuming he is otherwise healthy without fever, etc...
...Read more